Moore v. Northern Homes of Pennsylvania, Inc.

80 F.R.D. 278, 1978 U.S. Dist. LEXIS 15343
CourtDistrict Court, W.D. Virginia
DecidedSeptember 25, 1978
DocketCiv. A. No. 77-0242(R)
StatusPublished
Cited by6 cases

This text of 80 F.R.D. 278 (Moore v. Northern Homes of Pennsylvania, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moore v. Northern Homes of Pennsylvania, Inc., 80 F.R.D. 278, 1978 U.S. Dist. LEXIS 15343 (W.D. Va. 1978).

Opinion

MEMORANDUM OPINION AND ORDER

DALTON, District Judge.

Plaintiff has filed a motion to dismiss the counterclaim of defendant Northern Homes of Pennsylvania, Inc. (Northern), for the reason that Northern has never obtained a certificate of authority from the Virginia State Corporation Commission, has no registered agent in the state of Virginia, and is therefore barred from maintaining any action, suit, or proceeding in any court in the state°of Virginia, including the United States District Court for the Western District of Virginia, by virtue of Section 13.1-119 of the Code of Virginia, 1950, as amended to date. Section 13.1-119 of the Code of Virginia, 1950, reads in part: “No foreign corporation transacting business in this State without a certificate of authority shall be permitted to maintain any action, suit or proceeding in any court of this State, until such corporation shall have obtained a certificate of authority.” Jurisdiction of this court over this action is founded in diversity of citizenship. Therefore, this statutory qualification on the right to maintain suit in the courts of Virginia applies with equal effect in this court. Rock-Ola Manufacturing Corp. v. Wertz, 249 F.2d 813 (4th Cir. 1957); Woods v. Interstate Realty Co., 337 U.S. 535, 69 S.Ct. 1235, 93 L.Ed. 1524 (1949).

Northern does not deny that it is a foreign corporation transacting business in this State nor that it has never obtained a certificate of authority to do business in Vir[280]*280ginia. Instead, its response is that the motion to dismiss should be denied because of the failure of the plaintiff to file it within the period authorized by the Federal Rules of Civil Procedure. Northern filed its counterclaim against plaintiff on December 27, 1977. Plaintiff filed his reply to this counterclaim on January 12, 1978. Since that time plaintiff has submitted interrogatories to Northern, as well as requests for production of documents and admissions. Northern has answered plaintiff’s request for admissions and certain interrogatories and has objected to other interrogatories and the request for production of documents. On September 6, 1978, plaintiff filed the motion now before this court.

Rule 12(b), F.R.Civ.Proc., states in part, “that the following defenses may at the option of the pleader be made by motion: 1) lack of jurisdiction over the subject matter, 2) lack of jurisdiction over the person, 3) improper venue, 4) insufficiency of process, 5) insufficiency of service of process, 6) failure to state a claim upon which relief can be granted, 7) failure to join a party under Rule 19. A motion making any of these defenses shall be made before pleading if a further pleading is permitted.” Plaintiff’s reply to Northern’s counterclaim is permitted under Rule 12(a). However, it is not at all clear whether the defense plaintiff raises falls within the enumerated categories. These defenses are not exclusive, and the adoption of Rule 12 did not abolish all other motions which hencetofore could have been raised. 2A Moore’s Federal Practice ¶ 12.08[3], p. 2264 (1975). Furthermore, Rule 12(b) should-be read in conjunction with Rule 12(h), which states:

“(1) A defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived . (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course.1
(2) A defense of failure to state a claim upon which relief can be granted, a defense of failure to join a party indispensable under Rule 19, and an objection of failure to state a legal defense to a claim may be made in any pleading permitted or ordered under Rule 7(a), or by motion for judgment on the pleadings, or at the trial on the merits.
(3) Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of.the subject matter, the court shall dismiss the action.”

Therefore, it appears that the question which Northern should address to this court is not whether plaintiff’s motion to dismiss was timely filed,' but whether plaintiff’s failure to raise the asserted defense prior to or contemporaneous with his reply to Northern’s counterclaim waived his right to raise it at this time.

The court might decide this question by its characterization of plaintiff’s defense. For instance, Va.Code § 13.1-119’s proscription that no unauthorized foreign corporation doing business in Virginia be permitted to maintain any action in any court of this State might be interpreted as taking away from Northern its capacity to sue in this court. See Rule 9(a), F.R.Civ.Proc. In that case, plaintiff’s failure to make a timely objection renders the defense waived. Summers v. Interstate-Tractor and Equipment Co., 466 F.2d 42, 49-50 (9th Cir. 1972). To dispose of plaintiff’s motion on the basis of such labeling, however, does little more than grind a hole to fit an odd-shaped peg. The problem requires more careful analysis.

Woods v. Interstate Realty Co., supra, is one of a number of cases applying the policy set forth in Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) and Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945), that a federal court whose jurisdiction is invoked by virtue of the diversity of citizenship of the parties before it should apply the substantive law and policy of the State in [281]*281which it sits. This policy itself seems to raise another question of labeling — Is the State rule of law being examined substantive or procedural? Even while dissenting from the decision in Woods, Justice Rutledge properly stated the analysis which should be used:

“The real question is not whether the separation [between substantive and procedural rules] shall be made, but how it shall be made, whether mechanically by reference to whether the state courts’ doors are open or closed, or by consideration of the policies which close them and their relation to accommodating the policy of the Erie rule with Congress’ power to govern the incidents of litigation in diversity suits.” Cohen v. Beneficial Loan Corp., 337 U.S. 541, 557, 559, 69 S.Ct. 1221, 1232, 93 L.Ed. 1528 (1949) (Rutledge, J., dissenting).

The Court in Woods found that a Mississippi statute similar to Virginia Code § 13.-1-119 was an expression of that state’s substantive policy that foreign corporations failing to comply with its law requiring the designation of agents to receive service of process should not themselves be allowed recourse in the courts of that State. Therefore, the federal courts sitting in diversity suits in Mississippi must adopt the same policy for themselves.

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Cite This Page — Counsel Stack

Bluebook (online)
80 F.R.D. 278, 1978 U.S. Dist. LEXIS 15343, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moore-v-northern-homes-of-pennsylvania-inc-vawd-1978.